M/S.Midwest (I) Industries Limited (In Prov Liqn) vs. No Respondent

Facts

The Official Liquidator of M/s. Midwest (I) Industries Limited (in provisional liquidation) filed an application before the Telangana High Court. The application sought to take on record the half-yearly accounts for the period October 1, 2023, to March 31, 2024, along with an Independent Auditor's Report dated May 27, 2025, submitted by M/s. Padmanabha Rao and Co. The Official Liquidator also requested permission to pay an audit fee of Rs. 500 plus GST to the auditors. Additionally, the application sought permission to meet the costs of the application, such as court fee stamps and notary charges, from the company's available funds or the Estate and Establishment Fund, subject to reimbursement upon realization of the company's assets.

Held

The Court held that the half-yearly accounts of the subject Company, which is in liquidation for the period from 01.10.2023 to 31.03.2024, along with the Auditor's Report dated 27.05.2025 submitted by M/s. Padmanabha Rao & Co., Chartered Accountants, are taken on record. Permission was accorded to the Official Liquidator to pay an audit fee of Rs. 500/- plus GST to the Auditor. Furthermore, permission was granted to the Official Liquidator to make the said payment from the available funds of the Company (in liquidation), or from the Estate and Establishment Fund account if no fund is available in the Company's account, subject to reimbursement from the funds of Company (in liquidation) upon realization of its assets. The Court was satisfied with the reasons mentioned in the supporting affidavit and upon considering the half-yearly accounts filed by the Official Liquidator.

Key Issues

1. Whether the half-yearly accounts of the company in liquidation for the period from 01.10.2023 to 31.03.2024, along with the Independent Auditor's Report dated 27.05.2025, should be taken on record, as required under the Companies Act, 1956 and the Companies (Court) Rules, 1959? 2. Whether permission should be granted to the Official Liquidator to pay an audit fee of Rs. 500 plus GST to the auditors, M/s. Padmanabha Rao and Co.? 3. Whether the Official Liquidator should be permitted to meet the costs of the application from the company's funds or the Estate and Establishment Fund, subject to reimbursement? The Official Liquidator argued that the application was necessary for the proper administration of the company in liquidation and that the requested permissions were routine procedural steps. The revenue or State did not appear to have made any arguments as the matter was an application by the Official Liquidator for court approval.